The British taxpayer has been fleeced by the deal which saw Lloyds sell their Halifax estate agency for £1, an agent has claimed. He is demanding that questions be answered.
The deal, which completed in mid-January, has been slated by Essex agent and Tory activist Russell Quirk, of eMoov.
He says the estate agency chain was worth more – and that buyers LSL should never have been given cash on top.
He said: “Even in a thoroughly depleted market, it was surprising that the deal was done for a paltry £1. Previous estimates had been that the 218 offices might fetch £10m.
After all, in 2007, a rather different market admittedly, Foxtons, at one-tenth the size with 24 branches, sold for over £300m.
“What is more deeply troubling, however, is the fact that up to £36m in cash seems to have also been channelled to LSL by Lloyds as a ’sweetener’. This was to cover ‘restructuring, rebranding and working capital’.
“When you consider that Lloyds, aka HBOS, was bailed out by the taxpayer to the tune of £14bn in 2009, this means that you and I ‘own’ the bank by way of a majority public stake.
“What that equates to in turn is that Joe Public has effectively bunged an estate agent £millions in order to persuade it to take ownership of a rival estate agency firm – and one that the public already owned.
“It’s akin to putting your car up for sale and then leaving cash to three times its value in the glovebox and letting someone drive off with it.”
Quirk says the deal actually cost the public £46m, taking into account the £10m valuation plus the £36m ‘sweetener’, and made no sense.
“Halifax estate agents was losing around £2m per annum. So it could have traded for another 23 years on the same basis and HBOS would have been no worse off if it had held its ownership of it.
“Given that no one expects the housing market to be in such a doldrums-like state for quite that long, what was the real motive behind this deal? Lloyds says it wanted to ‘tidy up’ its operations and that estate agency just ‘doesn’t fit in any more’.
“Such a whimsical decision has cost the taxpayer dearly and my view is that, given the cost, more questions certainly need to be answered by the decision makers.”
Quirk set up eMoov, a virtual estate agent, after selling his former business, Quirk Deakin, last November. He runs a regular blog.
https://www.emoov.co.uk/blog/219/tax-payer-fleeced-on-halifax/
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Comments
Well I agree with Russell Quirk - if I had a Halifax branch nearby I, as a tax payer, would be livid! I would have gazumped LSLs offer (upped it by at least 100% i.e. £2 if i was given the opportunity). Lets face it this was a face saving deal - no job losses - yet! And no bad press! And it won't be long before the asset stripping starts - with director bonuses to follow.
Well - i've bookmarked the "toy cow" site - amusing and pertinent blogs there - unique in our industry.
Old news, why is Quirk drumming up free PR I wonder? His site sounds like a kids toy cow.
the £36m ‘sweetener’ is shocking but a company that makes no money is worthless. Hardly comparable to the foxtons deal.
yet another Corporate shocker............